Overtime Pay Calculation: Should We Include Only Basic+DA or All Fixed Allowances?

Ramesh Rajagopal

Please let me know the statutory requirements for calculating overtime. Should we consider only Basic+DA or Basic+DA+All Fixed Allowances?

trisha_hr

Dear Ramesh,

For overtime calculation as per the Factories Act, we have to consider only the basic salary and DA, and not any other allowances. Overtime should be paid at double the salary rate only when the particular employee works for more than 48 hours in a week or more than 9 hours in a day.

Cheers,
Trisha
HR Professional

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